U.S. stocks dropped hard at the open on Tuesday morning, violating their recent lows and testing levels not seen since July. Investors were spooked by concerns over Italy’s fiscal course as well as weak earnings from the likes of Caterpillar (NYSE:CAT), raising doubts about the sustainability of 20%+ earnings growth.
Other worries include Brexit, China tensions and the saga surrounding Saudi Arabia and the brutal death of a Washington Post journalist.
There is some evidence of firming — the VIX didn’t exceed its high of 25 and the afternoon is bringing in a round of buying demand. Yet major price damage is being done. Especially to stocks in areas like industrials and energy.
With all that said, here are seven industrial and energy stocks to sell as they lead the way down:
Anadarko Petroleum (APC)
Anadarko Petroleum (NYSE:APC) stock is dropping hard below its 200-day moving average and is testing its mid-September low, which means APC is threatening a drop back to levels last seen in April. Already down more than 18% from its early July high, the stock is under pressure as crude oil prices pull back from their early October high.
The company will next report results on Oct. 30 after the close. Analysts are looking for earnings of 87 cents per share on revenues of $3.5 billion. When the company last reported on July 31, earnings of 54 cents per share misses estimates by 4 cents on a 21.2% rise in revenues.
Concho Resources (CXO)
Concho Resources (NYSE:CXO) stock has fallen below both its 50-day and 200-day moving averages, setting up a decline to the lows tested in August and September. Already down more than 10% from the multi-top high near $160, watch for a drop to the June low, which would be worth a further 12% fall from here. Analysts are lukewarm, with both Barclays and Morgan Stanley initiating coverage with a neutral rating.
The company will next report results on Oct. 30 after the close. Analysts are looking for earnings of $1.16 per share on revenues of $1.1 billion. When the company last reported on Aug. 1, earnings of $1.24 per share beat estimates by 30 cents per share on a 66.7% rise in revenues.
Diamond Offshore (DO)
Diamond Offshore (NYSE:DO) stock is dropping hard below its 50-day and 200-day moving averages, down more than 20% from the highs tested and retested over the past few months near $20. A series of analyst downgrades have battered sentiment this month, including cuts from Johnson Rice and JPMorgan.
The company will next report results on Nov. 5 before the bell. Analysts are looking for a loss of 38 cents per share on revenues of $280.6 million. When the company last reported on July 30, a loss of 33 cents per share beat estimates by 6 cents on a 32.7% decline in revenues.
Halliburton (HAL)
Halliburton (NYSE:HAL) stock is breaking down to new lows, falling below the support from the early September selloff as well as the lows seen in the summer of 2017 and in late 2016. Prices are returning to levels seen in April 2016, down nearly 40% form the repeatedly tested highs near $56. The company reported results on Monday, with earnings of 50 cents per share beating estimates by a penny on a 13.4% rise in revenues.
The company will next report results on Jan. 21 before the bell. Analysts at Cowen warned this week that the bottom may not yet be in for earnings given ongoing challenges in the North American business.
C.H. Robinson (CHRW)
C.H. Robinson (NASDAQ:CHRW) stock is dropping hard below its 200-day moving average, returning to levels last seen in July as it falls away from the high set near $100. Analyst at Cleveland Research assumed coverage with a neutral rating last week while Loop Capital initiated with a buy rating. However, investors could care less amid worries about the health of the U.S. trucking market. This is especially true if higher interest rates crimp consumer demand.
The company will next report results on Oct. 30 after the close. Analysts are looking for earnings of $1.17 per share on revenues of $4.3 billion. When the company last reported on July 31, earnings of $1.13 beat estimates by 6 cents on a 15.3% rise in revenues.
Cummins (CMI)
Cummins (NYSE:CMI) shares are gapping lower, falling further away from the 50-day moving average to return to levels last seen in July. The diesel engine maker has seen shares lose nearly 30% from the highs seen in January and were recently turned around at the 200-day moving average despite an initiation of coverage with a Buy rating by Loop Capital last week.
The company will next report results on Oct. 30 before the bell. Analysts are looking for earnings of $3.75 per share on revenues of $6 billion. When the company last reported on July 31, earnings of $4.14 beat estimates by 48 cents on a 20.8% rise in revenues.
Lockheed Martin (LMT)
Shares of Lockheed Martin (NYSE:LMT) are all over the map on Tuesday after the company reported quarterly numbers. Earnings of $5.14 beat estimates by 83 cents on a 16% rise in revenues. Forward guidance was strong, but valuations look extended here, especially with President Trump discussing another tax cut that could further weaken the U.S. Treasury’s ability to fund military expenditures.
Previously, the company reported on July 24 with earnings of $4.31 per share beating estimates by 83 cents on a 16% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
